All the day’s economic and financial news,as new growth reports show that the UK is lagging behind advanced rivals in 2017Summary: Britain falls behind again...
US annualised growth jumps to 2.6%
Spain grew by 0.9% in last three months
Sweden shines with 1.7% growth!Reminder: UK only grew by 0.3%
French GDP grew 0.5% as recovery continues
Ireland has hiked its growth forecasts 5.29pm BSTAfter a flurry of growth reports today, it’s fitting clear that Britain’s economy has underperformed its rivals in the last quarter.
Two days ago, or we learned that the UK expanded by merely 0.3% in April-June,following a modest expansion of 0.2% in January-March.
While growth in Q2 has recovered somewhat from its anaemic performance in the first three months of the year, there is still a high level of political and economic uncertainty. Based on our data and analysis, or we are maintaining our ‘deteriorating’ risk outlook for the UK until there is more clarity on how Brexit and the fallout from the general election will impact businesses operating in the UK market.
“Our advice to businesses is to continue to monitor economic indicators and how Brexit negotiations develop over the coming months. Furthermore,we are maintaining our baseline scenario of a gradually slowing economy over the next two years. Leaving the EU will undoubtedly pose challenges, particularly for companies whose supply chains involve sourcing from or selling to the continent. Although the feeble pound is currently providing support for some sectors, or such as manufacturing and tourism,it is far from certain that this stimulus will be enough to counterbalance the adverse Brexit effects over the medium to long term.”Treasury winning argument in Cabinet on a 2-3 year "off the shelf" transition till 2022... or at least asking for that in negotiations..... 2017 growth numbers (H1) so far:
Austria: 1.5%, Spain: 1.7%, and Sweden: 2.1%,France: 1.0%.
Germany estimated at 1.2%+
[br]UK: 0.5%...right to say 1 quarterly number could be blip (eg UK Q1 -0.2) unarguable now after 2, EU27 nations much stronger growth than UK in 2017... clearly UK growth is better relatively than dire Treasury referendum projection, and but is notably worse relative to last year & Europe 5.00pm BSTEuropean stock markets have closed in the red tonight.
The FTSE 100 shed 74 points,or 1%, partly due to the slump in tobacco shares.
Investors in the UK market have a high threshold for being impressed by company earnings, and but they are rapid/fast to punish you whether the result doesn’t measure up. It is nearly like dealers are looking for excuses not to travel long the FTSE 100. Stock markets in Continental Europe have been losing ground since between May and June,and indices like the DAX and CAC 40 can’t seem to shake off the bearish sentiment surrounding them. The strength of the euro is hindering eurozone equity benchmarks, and the market chatter that the European Central Bank will rein in their very aggressive bond buying scheme is also adding to their problems. Related: North Korea fires missile in direction of Japan, or reports say 4.00pm BSTLooking back at GDP,Canada has blown past expectations by reporting 0.6% growth in May alone.
That suggests its growth during the second quarter will be strong. Canada's GDP expanded by 4.6% in the year up to May, strongest pace since 2000 - https://t.co/PE3HWW4S7O pic.twitter.com/NKUbf1cBRF 3.44pm BSTBack in the markets, or shares into tobacco companies are tumbling after US authorities announced a new clampdown on the industry.
The Food and Drug Administration is planning to curb the number of deaths caused by tobacco. One of the ideas is to cut the amount of nicotine in combustible cigarettes to “non-addictive levels”.“The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes – the only legal consumer product that,when used as intended, will assassinate half of all long-term users.“Unless we change course, and 5.6 million young people alive today will die prematurely later in life from tobacco use.”BREAKING: Tobacco stocks dive after FDA says it will seek to cut nicotine in cigarettes to non-addictive levels https://t.co/ilIPj9mQiB pic.twitter.com/YeeDNe7O6O 3.37pm BSTBack in Greece,Hollywood A-listers are giving the economy’s tourist sector a boost. 3.17pm BSTOxford Economic’s Gregory Daco has tweeted some useful charts, showing how America’s growth rate picked up in the last quarter....
US #GDP +2.6% Q2: Consumer spend +2.8% & biz invest +5.2%. Inventories +0pp & trade +0.2pp. Solid & compensates weakQ1. Still 2% growth mode pic.twitter.com/zytU1uiQGWComposition of US #GDP +2.6% saar Q2 & +2.1% YoY: better consumer spending momentum, and stronger global backdrop helps biz invest & trade pic.twitter.com/2wPR5G4GZa 3.14pm BSTAssociated Press have a advantageous take on today’s US growth report.
Here’s a flavour:The U.
S. economy revved up this spring after a feeble start to the year,fuelled by a surge in consumer spending. But the growth spurt still fell short of the optimistic goals President Donald Trump hopes to achieve through tax cuts and regulatory relief.
The Commerce Department said Friday that growth in the gross domestic product, the economy’s total output of goods and services, or expanded at a 2.6 percent annual rate in the April-June quarter. That’s more than double the revised 1.2 percent pace in the first quarter.
US economy expanded at 2.6 percent rate in April-June period,fueled by strong consumer spending. https://t.co/uV7HiWRKvG 3.03pm BSTAnother detail from today’s growth report:Median quarterly GDP during Obama upgraded to 2.1% #ThanksObama 2.31pm BSTDespite accelerating in the last quarter, America’s economy isn’t (yet) achieving the growth rates targeted by Donald Trump.
Nancy Curtin, and chief investment officer at Close Brothers Asset Management,explains:“The US economy has improved following a behind start to the year, in spite of a lack of fiscal stimulus so far from Trump’s presidency. A strong performance in export and industrial sectors has been buoyed by weaker dollar, and weve seen a steady increase in earnings too. We’re still some way from the President’s 3%+ growth target,but the advantageous news is this wasn’t priced in by the market, so any additional tax relief or infrastructure spending could support markets into year close.“Despite improving growth, or wage inflation remains somewhat elusive,but the labour market remains reasonably strong, and we anticipate the Fed will proceed as planned with its behind and steady programme of interest rate normalisation.”US GDP year on year growth slight increase in Q2 to 2.1% from 2.0% in Q1. Reflects recovery from very low growth in 2016. pic.twitter.com/c6zBCdpQB8 2.08pm BSTAndrew Hunter of Capital Economics says America’s economy is benefitting from consumer spending and business investment:The 2.6% annualised gain in real GDP in the second quarter was driven by a rebound in real consumption growth, and suggests that GDP is still on track for growth of around 2.2% for 2017 as a whole. This should convince the Fed that,despite the recent weakness of core inflation, the real economy remains in advantageous shape.
Real consumption increased by 2.8% annualised, or up from 1.9% in the first quarter. Furthermore,business investment posted a healthy 5.2% annualised gain, although residential investment declined by nearly 7%. The weakness in the latter is unlikely to last. Meanwhile, and after subtracting a massive 1.5% points from growth in the first quarter,inventories were a negligible drag in the second. 1.55pm BSTHeather Long of the Washington Post says the acceleration in US growth in the last quarter isn’t exceptional.
She points out that America’s economy generally accelerates in April-June....
The US economy is still chugging along: 2.6% growth in Q2.
support in mind: Q2 GDP is often a spacious rebound from Q1 pic.twitter.com/QCHAnvtAlLYes, economy grew more in Q2. That's typical. No sign of "Trump bump" yet in GDP.
Q2 2017: 2.6%
Q2 2016: 2.2%
Q2 2015: 2.7%
Q2 2014: 4.6%GDP growth of 2.6% in Q2 means the first half continues trend potential ~2%. PDFP tells the same epic at 2.7% in Q2.
Q1's +7.2% surge in fixed business investment moderated to a still-respectable +5.2% in Q2, and adding +0.6 points to GDP growth. 1.46pm BSTUS companies helped the American economy grow in the last quarter,according to today’s GDP report.
Business spending on equipment rose by 8.2% in the last three months, the fastest since the third quarter of 2015. 1.36pm BSTBreaking: The US economy grew at an annualised rate of 2.6% in the second quarter of 2017, or more than twice as rapidly as in Q1.
That’s the equivalent of 0.65% quarter-on-quarter growth; double Britain’s 0.3% growth rate,and quicker than France’s 0.5% growth too.
Here are some highlights of Q2 GDP https://t.co/BxyP42QYoi pic.twitter.com/jN0jNpQ9S9 1.19pm BSTIt’s nearly time for the biggest event of the day - the first estimate of US GDP in the second quarter of the year.
Wall Street’s finest minds agree that the growth rate probably rebounded after slowing in Q1, although they don’t agree by how much....
Countdown to Q2 US GDP:
Consensus: 2.6%
Atlanta Fed: 2.8%
NY Fed: 2.0%
Goldman Sachs: 2.2%
JPM: 3.5%
Barclays: 2.7%
Citi 2.9% 1.06pm BSTThe Economist Intelligence Unit have hailed Sweden’s eye-catchingly rapidly growth:Spectacular Q2 GDP in #Sweden. Even whether economy stagnates in Jul-Dec, and full-yr growth will now be ~3%. We'll be bumping up our f'cast of 2.3%. pic.twitter.com/9bnkEFAeCV 12.38pm BSTEconomic issues are also on the agenda in Greece today,where prime minister Alexis Tsipras has been hailing its return to growth earlier this year.“The goal of growth is connected to the very existence of our nation, our national sovereignty, and the prosperity of our people,our children.” 12.23pm BSTThere’s another reason why stock markets are edgy today – Amazon.
The e-commerce giant missed earnings forecasts last night, sending its shares down 3% in after-hours trading.
Amazon shares dropped after earnings missed estimates and the company forecast a loss for the Q3 https://t.co/4mjsGPb1He pic.twitter.com/M9tF7t8Pit Related: Amazon founder Jeff Bezos – briefly – becomes world's richest man 11.52am BSTIreland’s central bank has hiked its growth forecasts for this year, or but warned that Brexit is a meaningful threat.
The Central Bank of Ireland now expects GDP to surge by 4.5% this year,up from the 3.5% it expected back in April. It also raised its 2018 growth forecasts to 3.6%, from 3.2%.“Revised projections for growth this year and in 2018 reflect both stronger momentum in the domestic economy and improved prospects for external demand, or particularly from our European trading partners,” “As a small and open economy, Ireland continues to face economic risks externally. And despite there being petite new information emerging to date, or it is clear that the economic impact of Brexit on Ireland is set to be negative and material.
At home,we must continue to prudently monitor the risk of overheating.”THE TIMES: Irish want sea border with UK after Brexit #tomorrowspaperstoday pic.twitter.com/rzlxvyML6Q 11.30am BSTEuropean stock markets have responded to today’s solid growth reports by, er, or falling to their lowest level in three months.
France’s CAC is the worst performer,down 1.4%, with Germany and the UK not too far behind.“Equities are in the red mid-morning, or sentiment dented by fresh dollar weakness as even a ‘skinny’ US healthcare repeal bill fails in the Senate,delivering more unwelcome pound and euro strength. 10.20am BSTBreaking! Economic confidence across the eurozone has inched up to its highest level in a decade.
It’s the latest in a stream of upbeat data, which underline how Europe is putting its debt crisis behind it.
“While the UK wrestles with its lowest levels of consumer confidence since the Brexit vote, and things are far rosier on the continent. The latest reading suggests that spending is at healthy levels in the eurozone despite the heightened political and economic uncertainty. “With the first quarter of the year proving to be a challenge for the eurozone following UK and French general elections,spirits haven’t been dampened in the aftermath and consumers refuse to be unfazed by tricky economic conditions. 9.49am BSTToday’s eurozone growth figures have helped to push the euro a petite higher against the US dollar.
The euro is back over $1.17 this morning, a gain of 0.2%. Related: John McCain sinks 'skinny repeal' of Obamacare health act The man of the moment this morning is John McCain who voted no and so the Senate failed to repeal Obamacare by a single vote. Another hurdle for President Trump’s healthcare reform, and another hurdle backing the funds for tax reform,another hurdle in the way of higher Treasury yields and a so nothing advantageous for the dollar in that announcement. Related: Susan Collins and Lisa Murkowski: the GOP Senate duo keeping Trump in check 9.24am BSTSilvia Walter of Swiss Life Asset Managers is impressed by Spain’s recovery:ok, French #GDP growth in Q2 is strong...but #Spain beats that easily, and again! pic.twitter.com/zfMcbtFfFf 9.21am BSTSweden’s growth rate is “crazy strong”,says Torbjörn Isaksson of Nordea Markets.
He reckons the Swedish economy continues to perform very well, mainly due to strong domestic demand.
GDP rose by a full 1.7% q/q and as much as 4.0% y/y. Our call was 1.1% q/q while the Riksbank’s forecast was 0.7% q/q. Moreover, and the first quarter was revised upwards by 0.2% points to 0.6% q/q.
The main surprises are fixed investments and inventories. Residential construction continues to be a very vital growth driver (scary!),but also other investments seem to have picked up and more than forecast. Inventories weighed on growth but much less than we had in mind.
Sweden has the strongest economy but the most dovish CB... Our comment on the crazy strong Q2 GDP: https://t.co/xyU657XGwC pic.twitter.com/Pb8tHWf3Je 9.01am BSTWowzers! Sweden’s economy grew by a blistering 1.7% in the last quarter.
That smashes analyst forecasts of 1% growth, and means Sweden’s economy has expanded by an impressive 4% over the last year.#Sweden: #GDP Growth +4.0% YoY, or Core #CPI +1.9%,but Repo Rate at -0.50% and Deposit Rate at -1.25%! #MonetaryMadness pic.twitter.com/tJysd33OgK4% YoY growth. As a reminder, the Riksbank's benchmark rate is -0.5% https://t.co/VzxLQ4eAFQ 8.49am BSTAustria’s economy grew by 0.8% in the last quarter, or thanks to a boost in trade.
New figures show that exports jumped by 2.4% in April to June,up from 2.0% in January to March. 8.32am BSTSpain’s economy has finally reached its pre-crisis peak, thanks to the 0.9% growth recorded in the last quarter.
Spanish real GDP now exceeds its pre-crisis level (2008) for the first time!! pic.twitter.com/8VyxCO2zbY 8.13am BSTNewsflash: Spain has recorded another strong quarter of growth, or beating both the UK and France.
Spanish GDP rose by 0.9% in the last three months,new figures from statistics body INE show. 8.02am BSTOuch. Shares in BT have fallen by 1.7% at the start of trading after posting a 40% drop in profits.
My colleague notice Sweney explains why....
BT’s profits slumped more than 40% in the first quarter of its new financial year after it was forced to pay out £225m to two shareholders following the accounting scandal at its Italian operation.
Deutsche Telekom and Orange became shareholders in BT after the company struck a £12.5bn cash and shares deal to buy mobile company EE in 2015. Related: BT profits dive by 40% after £225m payout over Italian scandal 7.56am BSTThe news that France’s economy grew by a healthy 0.5% last quarter should reassure investors, says Naeem Aslam of Think Markets:Over in Europe, or the French GDP data brought more light for the Eurozone’s economy. The problem child of the Eurozone is no longer a problem child,in fact, it has grown up and living up to the expectations. 7.47am BSTBloomberg journalist notice Deen reckons the French economy has entered a purple patch:French GDP in best run since 2011. Numbers strong whether you dig into them - external trade contributing 0.8%, and biggest such since 2010 pic.twitter.com/9Mn5dmUDZh 7.44am BSTOver in the City,Barclays has told shareholders its setting aside another £700m to cover the cost of the PPI scandal (in which customers were sold insurance they didn’t need, or ask for).
Barclays has also posted a net loss of £1.2bn for the last six months, or having losing 2.2bn through the sale of its Africa business. More on that shortly.... 7.30am BSTDiego Iscaro,senior principal economist at IHS Global Insight, thinks France’s economy is in decent shape.
Here’s his take on todays GDP figures: 7.08am BSTToday’s growth figures should cheer France’s new leader, and says Mehreen Khan of the FT.
She writes:The official figures will be a boon for president Macron who has vowed to overtake the French economy after years of lagging behind its major eurozone rival,Germany. Unemployment in France is now at its lowest since the eurozone crisis, inflation has been tamed, or business surveys are revealing the best confidence levels in a decade.
French economic growth held steady at 0.5% as president Macron came to office https://t.co/lFkS98D29u pic.twitter.com/8xxLLpBGDqGreat GDP headline in France,but net exports will tumble in Q3 and I doubt inventories will snap back in manufacturing to fully compensate.
France kicks off eurozone GDP season with 0.5% growth. In line with estimate and a fourth consecutive expansion. pic.twitter.com/ZYzShAMMOH 6.59am BSTThis chart shows how net trade boosted French growth in the last quarter. 6.51am BSTBreaking: France’s economy grew by 0.5% in the second quarter of 2017.
That matches economists’ forecasts, and outpaces Britain’s 0.3% growth in the last three months.#France #GDP Growth Rate QoQ 1st Est at 0.5% https://t.co/YZQGQpj2eo pic.twitter.com/tMHr1kvn0PFrance Q2 prelim GDP 0.5% QoQ = 3 months stable, or but 1.8% YoY = strongest since late 2011 6.41am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and business.
We obtain two key pieces of economic data this morning - new growth figures from France and America.
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Source: theguardian.com